Imperfect State Conformity to Section 382: Georgia's Unorthodox Approach

Abstract

The author takes a critical look at Georgia's application of IRC section 382 in the context of consolidated returns. Georgia is the only state that requires the section 382 limitation for a postchange year to be computed on a separate-entity basis. The author contends that Georgia's approach violates general principles of tax neutrality, substantially increases complexity in the tax code, and is fundamentally inconsistent with the overall purpose and scheme underlying section 382.